Hey Joe, you got some 'press' w/r to the Bin Laden Trade in this evening's edition of GATA Bill Murphy's LeMetropole Cafe....
"Bill;
I received a query from a mutual friend yesterday asking me if I had heard anything [a rumor] about rather large bet [4.5 billion] being made in Put Options for an equity market crash in Sept. Specifically, I was asked if there was any reportable exchange data that wound either confirm the rumor or expose it as an
‘Urban Myth’.
So, I went to the Philadelphia Exchange and did an analysis of the 9 Indexes that make up the Spiders [SPDRS] – representative of the S & P 500 along with the XAU - and the Put/Call ratios as well as volume data – comparing August [to the week ending the 24th] to the month of July. Interestingly, the Put / Call ratios - perhaps counter-intuitively to most - improved from July to August – and August is when all of the Sub-Prime crap really hit the fan.
Here is a break out of Put / Call ratios:
July - August [to the week ended 24th]
XLU [Utilities] 4.98:1 - 2.52:1
XLP [Consumer Staples] .42:1 - .87:1
XLV [Healthcare] 4.21:1 - 1.43:1
XLB [Materials] 6.28:1 - 4.07:1
XLY [Cons. Disc.] 3.93:1 - 3.33:1
XLE [Energy] 2.45:1 - 1.54:1
XLF [Financials] 4.41:1 - 2.19:1
XLI [Industrials] .72:1 - 1.43:1
XLK [Tech.] .31:1 - . 76:1
XAU [Hedged Gold Bug Index] 1.46:1 - .73:1
I have not included volume data – but there are no real disparities between the two time periods to report there. So, on the whole – it would appear to me that the "internals" are improving in nominal terms. My best guess is that this shift in internals is a manifestation of the liquidity add by CB’s, perhaps forming a frothy white-cap on the hyper-inflationary tsunami of new money being pumped into the system.
In my view, this lends credence to the notion that ALL stock markets are Ultimately GOING UP.
If the rumor were true and especially if anyone had for-knowledge of it - I would intuitively expect the Put / Call ratios to be worsening from July to August.
This is not the case.
Best,
Rob
A comment on this from Easy Ed in New Zealand:
Bill:
Let's assume that this Joe Stocks theory was all based upon bad data. The fact is, we all believed such a wild bet was POSSIBLE. Nothing surprises us.
Let us not forget those trillions of Dollars of derivatives that do exist. Wild bets already exist, many impossible to unwind in an orderly fashion. Joe Stocks may be wrong in this instance but the implosion of the financial markets is almost guaranteed.
Cheers, Ed"
News 
Market Data 
Discover 
